Healthways agrees to settle on kickback charges

Healthways will pay $40 million related to a settlement agreement over alleged illegal physician payments at a subsidiary. The whistle-blower lawsuit was filed in 1994 by a former employee on behalf of the federal government. The lawsuit alleged that the company's Diabetes Treatment Centers of America, or DTCA, illegally paid physicians in exchange for patient referrals. Franklin, Tenn.-based Healthways, a disease management and wellness company, admitted no wrongdoing in the settlement and said it has agreed to pay $28 million to the federal government and incur another $12 million for related costs and services. The deal requires approval from the Justice Department. “We continue to believe that we conducted our DTCA business in full compliance with applicable law but ultimately concluded that the proposed settlement is in the best interests of the company and its shareholders,” Ben Leedle Jr., chief executive officer of Healthways, says in a written statement.